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8 ways that loyalty & online ordering help to grow your hospitality business

8 ways that loyalty & online ordering help to grow your hospitality business

In the increasingly competitive world of hospitality, businesses are always looking for an edge, for something to set them apart, help beat the competition and generate more revenue.

 

Loyalty programs and online ordering are high on the agenda.

 

Australians have a high level of engagement with loyalty programs – we just love to love our favourite stores, banks and hospitality venues. The MasterCard survey ‘Achieving Advocacy and Influence in a Changing Loyalty Landscape’ found that a massive 79% of Australian consumers are members of retail loyalty plans, 50% and 43% are in airline and financial institution programs with a much lower 28% taking part in restaurant programs and only 19% in hotel schemes. Which means for hospitality businesses there is scope to grow customer engagement and grow their business through loyalty.

 

In terms of why Australian consumers join a loyalty plan, the same survey shows the top three reasons as:

  • No cost to join
  • Rewards are relevant
  • Rewards are easy to earn

 

The most popular rewards are points (48% saying they valued them most highly), discounts and cashbacks (32% each). Millennials in particular want to have the choice of using their points in the venue or online.

 

But it’s not just the loyalty program itself that generates loyalty – true advocacy, where someone really loves your business, and is an active promoter, comes from being truly engaged and having a great customer experience. If consumers have a positive experience, they’re going to keep coming back – a.k.a customer retention. Research by Rosetta Consulting found that engaged customers are five times more likely to buy only from the same brand in the future.

 

This is where online ordering systems play an important role. Whether you have your own in-house branded ordering app, or whether you are a part of the online food delivery revolution (think UberEats, Deliveroo), making it easier for your customers to do business with you plays a big part in getting them to fall head over heels in love.

 

So for the Australian hospitality market, there is certainly scope to engage a larger proportion of consumers in loyalty programs and online ordering doesn’t look like it’s going away any time soon. Let’s take a look then, at the eight ways these approaches can help you grow your hospitality business.

 

  1. Repeat visits – customers who love you buy from you more often. Once they know you make their coffee just the way they like it, and that they to earn and spend loyalty points, they’re going to keep coming back for more. The more they visit, the more they spend.
  2. Higher spend – the repeat visit phenomenon generates sales in itself, but the benefit is multiplied by the fact that not only do your loyal customers come through your door more often, but they spend more once they’re there. Because they like you, they are more open to an upsell or cross-sell request. According to research from Rosetta, the increase can be up to 60%, and they also say that the 80/20 rule is in full force here, with loyal customers typically accounting for 20% of your total numbers but around 80% of revenue.
  3. They tell more people – in hospitality, referrals are everything. Consumers are far more likely to act on the basis of the recommendation of another consumer than on the basis of your advertising and promotions. It doesn’t even have to be a referral from someone they know – the power of social media gives enormous credibility to the feedback and reviews of unknown others. Think Google reviews, TripAdvisor, Urban Spoon, Zomato – all influence potential customers for and against you. Loyal customers are more likely (Rosette says 90% more likely) to post reviews, say positive things and to tell others about you, online and in person.
  4. Decreases price sensitivity – when consumers love a brand or product, it is rarely because it is the cheapest. Part of being an advocate means that price is not the main decision factor, which means that you can focus on delivering a great product at the right price, not necessarily the lowest price.
  5. Faster path to growth – many marketing studies have shown that increasing ‘wallet share’ is a far more effective way of increasing revenue that finding new customers. Your loyal customers already love you, you know them and have a relationship with them, so it stands to reason that it will be faster and less costly to grow your business with them.
  6. Analytics – customer information is gold. Understanding who buys what, when and how is priceless information for marketing, product development, sales campaigns, menu planning, staff planning – it can help you drive efficiencies in just about every part of your business. The beauty about loyal customers (apart from them spending more) is that they are willing to engage with you, share their information and engage. Which gives you data, that you use to serve them even better and so the virtuous cycle goes on.
  7. Customer experience – in our ‘not a minute spare’, fast paced world, being able to offer a fast and easy way to order food is one of the key ways you can improve your customers’ experience. Giving them the ability to find you, see the menu and order from their device, earn points, pay with points, and know their order is going to be ready makes you the good guy who just made their life easier.
  8. Wider audience – if you’re part of one of the online ordering and delivery platforms, such as UberEats or Deliveroo, you just got yourself seen by a far wider range of customers than just those that pass your door. The more customers who are aware of you, the more are going to find you and try you out. Especially if they don’t have to move from their couch to do it.


Great hospitality providers have always focused on positive customer experience. Online ordering can enhance that experience, and loyalty programs help to capture vital customer insights that ensure the business is delivering what its customers truly want. These are essential business tools, because customer experience isn’t just a warm and fuzzy ‘nice to have’ – it is a crucial element of growing a successful hospitality business.

 

Author - Carol Benton

 

Sources:

https://newsroom.mastercard.com/asia-pacific/files/2018/01/Loyalty-Solutions-Whitepaper.-AP-Region-20171.pdf

http://loyalty.collectapps.io/customer-loyalty-guide

http://currents.rosetta.com/2015/03/why-engaged-customers-are-your-best-customers-facts-figures-on-t...

 

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